Thursday, February 28, 2008

Chinese Cars spark in South Afican Auto Market more and more

We may set up a manufacturing plant in South Africa,” says Geely South Africa chairperson Jacqui van Heerden. “If we achieve sales of around 10 000 units a year, we’ll consider it. Markets such as the US and Europe may also offer lucrative export opportunities.”

Geely is only one in a series of Chinese vehicles which have entered the country over the last two years, all through entrepreneurs aiming to snatch market share in the largest economy in Africa.

Geely’s plans are indicative of a new phase in Chinese vehicle manufacturing. It’s no longer only about making and selling vehicles in China. It’s about making and selling vehicles in China, and everywhere else in the world. And not a Chinese-made Honda or Ford either, but a true Chinese brand.

Geely is one of the first movers in this regard. It can afford to do this as it has no bureaucratic ties.

Geely is privately owned, with no shareholding by the Chinese govern- ment – which erases the argument of unfair competition owing to State subsidies. (The only other privately owned Chinese vehicle manufacturer, Chery, will start exporting vehicles to South Africa later this year, with the distribution rights going to McCarthy.)

What this means for Geely South Africa is that the Chinese parent company holds a direct stake in the local company, as it considers South Africa an important part of its future export growth strategy.

Geely South Africa is, therefore, 40% owned by the Chinese parent company, and 60% by local company TJM Holdings.

Van Heerden says TJM Holdings looked at trends worldwide, and decided “that Chinese vehicles are going to be the next big thing”.

These days, South African business says ‘China’ is preceded by the same audible gasp once reserved for South Korea or Malaysia, or any other so-called Asian tiger.


Anonymous Anonymous said...

No, Chery is not yet a privately owned company. It is state owned but plans to launch an IPO withing the next year or so.

5:50 AM  

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